Remember Those 3 Signs of Inflation to Watch?

January 24, 2024

Mish's Daily

By Mish Schneider

As a follow up to a Daily I wrote on January 7^th called: Super Cycles Do Not Just Fade Away, yesterday’s January 23^rd Daily was all about one of the 3 indicators that can get us prepared for more inflation.

On January 7^th sugar was still trading under 22 cents.

Since then, SUGAR is up another 15%.

A quote from yesterday:

“Most noteworthy is the notion of super cycles.

Sugar is a great example of a 400% move higher since 2020, followed by a near 40% move lower. And currently, a 20% move up since it reached the nadir of 20.00.

Volatility-yes-the inherent nature of a super cycle.”

The second indicator I wrote about on January 7^th is how SILVER does relative to gold.

When silver begins to outperform gold, that is generally an inflationary sign.

This is a good time to remind you that the chart of CPI overlaying the 1970’s with current times lines up incredibly well. Has CPI troughed?

With so many saying inflation is over, clearly, they have not been paying enough attention.

Maybe now they will.

Silver, for the second day in a row, is outperforming gold.

The chart of March futures shows us that momentum could be just about to flash a mean reversion.

Furthermore, $22.00 is a solid risk point with overhead resistance at $24.

The 3^rd sign is the DOLLAR and if it makes a more drastic move lower from its current rangebound price action.

The dollar is wedged between the 50 (blue) and 200 (green) moving averages.

We can hardly say that it is collapsing or giving us cause for major concern right now.

Momentum is declining though. A move under the 50 and 200 MAs on our Real Motion indicator might raise some eyebrows.

Especially if the price fails 102.

This week we have PCE numbers coming out. That is a lagging and not a leading indicator.

We can assume that the number will be subdued.

This should give the FED room to discuss rate cuts for March.

Hence, we can be patient on the inflation plays for now-but certainly not complacent.

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Mish in the Media - All clips here

Yahoo Finance Mish makes up a new ETF (not real) called VAIN-but really discusses the basket of stocks that are worth watching 01-24-24

Business First AM Mish talks about Alibaba and how the opinions of China’s demise might be a bit exaggerated 01-23-24

Business First AM All about retail and the stock pick Abbvie (ABBV) 01-23-24

Schwab Network Mish and Nicole dig deep into trends and stocks to watch for next big moves as we are full January trend mode 01-22-24

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CMC Markets Are major commodities losing momentum? A look at oil, gold, dollar, the SPY and NatGas 01-17-24

Against All Odds Jason Perz Podcast-The mental game of trading, commodities, futures, equities, technical analysis, macro-we cover it all 01-16-24

StockchartsTV How Calendar Ranges can Predict Market Direction-Mish and Geoff cover how this indicator tells you who and what to believe, when to act and what to trade 01-16-24

Coming Up:

January 25 Live Coaching

January 25 F.A.C.E with Dale Pinkert

January 25 CNBC Asia

January 30 Singapore Radio Breakfast Bites

February 2 Benzinga Pre Market Show

February 5 Money Show Life with Chuck Jaffe

February 21-23 The Money Show in Las Vegas

Weekly: Business First AM, CMC Markets

ETF Summary

S&P 500 (SPY) 480 now the pivotal zone

Russell 2000 (IWM) 195 pivotal, 190 support to hold